As more financial service providers adopt machine-to-machine (M2M) solutions, it is becoming ever more apparent that these solutions are vital to economic inclusivity and innovation on the African continent, according to Jeremy Potgieter, SADC regional head at Eseye.
He notes that the financial sector has always been a front runner in technological advancements and is no stranger to the Internet of Things (IoT) and M2M.
“Already 95 percent of the African financial sector is engaged in IoT in some form or another. From ensuring POS transactions are timeously processed, to customer behaviour monitoring and data analysis, the financial sector is certainly geared to drive IoT uptake globally,” explains Potgieter.
He adds that far from being behind the digital curve, the numerous pioneering initiatives being explored by African developers are prompting major financial institutions to sit up and take notice.
“We see a large focus being placed on the underserved SMME where traditionally cash was the only means of transaction. Companies like eWater, M-Kopa, Yoco, Snapscan and iKhoka are making strides in bringing balance to the underserved, by providing payment solutions which meet their budgetary constraints.”
The benefits of M2M for financial services organisations are numerous, not least because the technology widens the net for more customers.
“Financial services have an impact on every industry imaginable, and it’s because of this that the sector needs to be abreast of innovation and show that they are in touch with an ever-changing landscape,” Potgieter says.
“M2M is the springboard to introduce mechanisms, which address the needs of the underserved to provide economic inclusivity while enabling growth for entrepreneurs and SMMEs, which we know are vital to the success of African economies,” he adds.
Much of the innovation already taking place on the continent has been spearheaded out of a very real necessity according to Potgieter.
“Small businesses have provided a gap, which entrepreneurial developers have identified and grown sustainable businesses as a result. Take for example the introduction of payment pebble, Yoco, Nomanini and Wongeta as solutions, all born and bred in Africa because of specific needs, which also cleverly subvert socio-economic challenges and lack of formal infrastructure.”
While financial service providers offering M2M solutions offer opportunities for higher efficiencies, the security of any and all solutions is of paramount importance and cannot be overstated enough.
“The impact unsecured solutions have on the financial sector are far reaching and hard hitting,” Potgieter warns,.
“It is the difference between economic stability and a complete collapse of industry. Banks stand or fall on confidence, trust and sturdiness.”
Thus the solutions Potgieter believes poised to be most successful will be those that not only provide higher efficiencies, but also ensure business continuity and allow for an ecosystem where dependency and trust will extrapolate opportunities and interconnected spinoffs.
M2M growth and innovation in Africa shows no sign of slowing, as the solutions being developed and perfected are not yet considerations in other parts of the globe.
“We see innovations in cash management through drop safe mechanisms to lower the risk of theft and violent crimes. Then there are mobile payment applications linked to cellular accounts, which are now more prevalent as the preferred method of payment rather than the use of cash or even owning a bank account in numerous African territories. These are just a few examples and they are growing on a daily basis.”